China is improving its digital currency – the electronic yuan – and it seems that it has more plans to use it as a means of payment.
China’s central bank recently launched its own wallet app (wallet software for smartphones). This wallet app is already partially available on the China App Store. According to Chinese data, it already has 140 million users.
Experts believe: The one-party state is putting the Beijing Olympics at the back of its mind here. I want foreigners to use the currency too.
A reason why many US Republican senators warn US Olympians not to use it!
In a letter, they asked the US Olympic Committee to ban US athletes from using the electronic yuan.
“Olympic athletes should realize that the digital yuan is used to monitor Chinese citizens and visitors to China on an unprecedented scale,” the letter said.
China also hopes that athletes will continue to use the wallet app after their return.
According to the senators, this is a very serious matter: “The integration of Chinese digital currency into global trade has many problematic implications for privacy.”
Means: Senators fear that China will use the electronic yuan to expand its watchdog — abroad, too.
This concern is not entirely unfounded: little is known about e-Yuan technology, as one of the leading German experts on cryptocurrency, Professor D. Philip Sandner, Head of the Blockchain Center at the Frankfurt School, explains at BILD. “Therefore, there is little to be said about data storage, profiling, etc.,” says Sandner.
It becomes especially critical when international companies make payments to each other on the yuan platform. “So you can analyze payment networks,” Sandner explains.
However, the digital yuan could break the monopoly of SWIFT (the communications system for most banks), Sandner explains.
A model for the digital euro?
The European Central Bank (ECB) and the Bundesbank are also working on a digital currency.
They want to learn from China, as Bundesbank President Jens Weidmann declared last year: “The People’s Bank of China has played a leading role in the development of such a digital currency, and we look forward to new insights into their projects.”
Exactly what does that mean? not clear. In response to BILD’s request, the Bundesbank only said: “There have been no bilateral talks or joint ventures with the People’s Bank of China on this matter recently.”
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